Xinhua Finance/Milken Institute Renminbi Pressure Indicator Update: RPI Growth Slows in June; China's Trade Surplus Hits Record High

Xinhua Finance/Milken Institute Renminbi Pressure Indicator Update: RPI Growth Slows in June; China's Trade Surplus Hits Record High

July 23, 2007

    SHANGHAI, China, July 23 /Xinhua-PRNewswire/ --
People's Bank of China releases figures for April, May and
June with the following indicator changes:

    (Logo: http://www.xprn.com/xprn/sa/200611140926.gif )

    Indicator Change

     June 2007: 210.9
     May 2007:  208.4
     Month-to-month change: 1.18%
     June 2006: 184.7
     Year-to-year change: 14.22%

     Click here to download the chart
    
http://www.xinhuafinance.com/sc/charts/ipo_rpi/0707/rpi_chart0707.jpg

    Highlights 

    In June 2007, the Renminbi Pressure Indicator (RPI)
score rose 1.18 percent as China's foreign exchange
reserves increased to US$1.33 trillion, up 42 percent over
last year. The deposit interest rate at banks remained
constant for the second consecutive month, at 3.06 percent.
The yuan continued to appreciate and, as of June 29, traded
at 7.65 yuan per U.S. dollar.

    Analysis 

    The relatively small appreciation in the yuan and
unprecedented foreign exchange reserves continued to push
the RPI higher in June, to 210.9 from 208.4 in May. Over
the period, the RPI grew by 1.18 percent. The bank deposit
rate increased 0.27 percentage point in May.

    Of the 1.18 percent increase in June, 1.03 percent can
be attributed to increasing foreign reserves and 0.15
percent to yuan appreciation. The monthly trade surplus
reached an all-time high of US$26.9 billion, up from
US$22.5 billion the previous month. The 19.7 percent
increase is partly due to the announcement of tax rebates
reductions on more than 2,800 export products, with
exporters trying to fill orders before the cuts took effect
on July 1. Interest rates remained constant in June. The
growth in China's trade balance and foreign exchange
reserves-the world's largest-has shown no signs of slowing,
despite the 8 percent yuan appreciation that began with the
exchange rate revaluation in July 2005.

    The indicator frequency is dependent upon the release
of foreign exchange data from the People's Bank of China. 
In mid-July, the bank released figures for April, May, and
June. Over that period, the RPI grew by 4 percent.

    Methodology 

    The RPI is based on a monthly examination of the
interaction between the following variables to compute
overall cumulative exchange rate pressure: the percentage
change in the spot exchange rate, the percentage change in
foreign exchange reserves, and the change in domestic
interest rates. The indicator measures the pressure on
China's currency relative to the U.S. dollar. It is set
equal to 100 on January 1, 2000. Increases in the RPI
reflect appreciation pressure on the renminbi (RMB). 

    Xinhua Finance/Milken Institute China Indicators 

    The Xinhua Finance/Milken Institute China Indicators
provide investors, analysts, and financial professionals
insight into China's money and capital markets. Five of the
eight indicators have been launched since November 2006: the
Renminbi Pressure Indicator, the Chinese IPO Indicator, the
Market Adjusted Debt (MAD) Indicator, the Banking Strength
Indicator (BSI), and the Adjusted Trade and Finance (ATF)
Indicator. The remaining three indicators (the China
M&A Indicator, the China Privatization Indicator, and
the China Corporate Governance Indicator) will be launched
later this year.
 
    Period Coverage and Frequency

    The indicator covers the period from November 30, 1980,
through June 2007. Data are available from the Milken
Institute upon request. There will be a two- to four-month
delay in reporting values for the indicator, depending on
the release of information from authorities in China. 

    Sources of Data 

    The data used in the construction of the indicator are
obtained from the International Monetary Fund, People's
Bank of China, and State Administration of Foreign
Exchange. 

    To view additional information, visit
http://www.xinhuafinance.com/indicators/ and
http://www.milkeninstitute.org/chinaindicators/. 

    About Xinhua Finance Limited 

    Xinhua Finance Limited is China's premier financial
information and media service provider and is listed on the
Mothers Board of the Tokyo Stock Exchange (symbol: 9399)
(OTC ADRs: XHFNY). Bridging China's financial markets and
the world, Xinhua Finance's proprietary content platform,
comprising Indices, Ratings, Financial News, and Investor
Relations, serves financial institutions, corporations and
re-distributors worldwide. Through its subsidiary Xinhua
Finance Media Limited (NASDAQ: XFML), Xinhua Finance
leverages its content across multiple distribution channels
in China including television, radio, newspaper, magazine
and outdoor media. Founded in November 1999, Xinhua Finance
is headquartered in Shanghai, with offices and news bureaus
spanning 11 countries worldwide.   

    For more information, please visit
http://www.xinhuafinance.com/. 

    About The Milken Institute 

    The Milken Institute is a nonprofit, independent
economic think tank whose mission is to improve the lives
and economic conditions of diverse populations around the
world by helping business and public policy leaders
identify and implement innovative ideas for creating
broad-based prosperity. The Milken Institute has extensive
expertise in China and conducts ongoing research on China's
banking and capital markets. It is based in Santa Monica,
Calif. For more information, please visit
http://www.milkeninstitute.org/.


    For more information, please contact: 

    In China:
     Xinhua Finance 
     Ms. Joy Tsang
     Phone: [phone] or [phone]
     Email: [e-mail]

    In Japan:
     Taylor Rafferty (Media contact for Xinhua Finance)
     Mr. James Hawrylak
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     Phone: [phone]
     Email: [e-mail] 

    In Europe:
     Faisal Kanth 
     Phone: [phone]
     Email: [e-mail]

    For the Milken Institute 
     Ms. Jennifer Manfr¨¨, Associate Director of
Communications 
     Phone: [phone]
     Email: [e-mail]